The Government Pension Fund Global, the world’s largest wealth fund, cut its holdings in French and U.K. government bonds by almost half last year as it raised its share of government bonds in emerging-market currencies to 10% of its fixed-income holdings by adding investments in Turkey, Russia and Taiwan.

“It’s what we perceive as a risk-reducing investment strategy,” Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, said in a March 8 interview in Oslo. Cutting dollar, yen, euro and pound investments is a “prudent” move, he said. “These four major currencies all have structural issues, with regards to government debt, to private sector debt, to unconventional monetary policy, and to growth and the demographic profile of the countries.”

At issue is how central bankers across the globe will eventually unwind the uncharted stimulus measures enacted to prop up global growth since the onset of the financial crisis in 2008. Debt levels have soared for governments across much of the developed world. In Europe, political leaders are trying to save the region from a fiscal crisis now in its fourth year.

Federal Reserve Chairman Ben S. Bernanke and other policy makers have signaled they will continue to act to boost sluggish economic growth, potentially setting the stage for another round of “Great Monetary Easing” according to Morgan Stanley. The International Monetary Fund predicts the world’s developed economies will grow 1.4 percent this year, half the average pace of 1994 to 2003.

Krone Gains

Calls for greater stimulus in the U.S., Japan and Europe have also intensified concern over a so-called global currency war that risks debasing exchange rates. Even Norway’s central bank, which oversees the country’s wealth fund, has joined the push to cool the krone’s appreciation. The bank in 2011 and 2012 cut interest rates twice, in part to weaken the krone. Governor Oeystein Olsen said last month the bank was prepared to cut its benchmark again to counter further strength.

Norway, which emerged as a haven from Europe’s debt crisis, has seen its currency rise about 22% against the euro since early 2009.

Japan’s currency has fallen to its lowest level against the dollar in 3 1/2 years in anticipation of greater stimulus from Prime Minister Shinzo Abe and his preferred candidate to lead the bank of Japan, Haruhiko Kuroda. In France, Industry Minister Arnaud Montebourg said last month the European Central Bank should “confront a new currency war” as the euro strengthened. Analysts surveyed by Bloomberg are also betting the pound will weaken on increased stimulus in Europe’s third-largest economy.